Tuesday, 4 July 2017

An estimated shortfall of £500 million in Network Rail’s budget over the final 20 months of Control Period 5 is already translating into significant falls in renewals demand for contractors, primarily in the track, signalling and consultancy disciplines...The problem we’re facing currently is particularly acute, because of high expenditure in the early years of the Control Period and partly because of increases in renewals unit rates. As a result, suppliers are reporting falls in demand of between 20 per cent and 45 per cent: this is already resulting in redundancies, short-time working, and reduced or frozen graduate and apprenticeship recruitment in the sector.Furthermore, it is possible that some smaller or niche suppliers may not survive until Control Period 6 (which starts in April 2019) and some larger suppliers may choose to use resource in areas where there is a more stable workload – especially in the resurgent overseas railway market. This would reduce the supply chain available to Network Rail and potentially increase future costs....So we hope the Treasury, and a supportive Chancellor, is willing and able find a way to address the current shortfall. Moving forward to a suitable funding mechanism needs to be found which avoids another repeat of the current situation again in five years’ time.

Indeed.Although we might be in with more of a chance if NR hadn't already blown the CP5 budget...